Today may be the most perfect #TaxNerd day possible. Not only are federal tax returns due, but the Supreme Court is actually hearing a tax case today! (For lots of great Surly coverage of Wayfair, check out Adam’s posts.)
In honor of today, I decided to wear my Illinois sales tax cufflinks. And how did I get Illinois sales tax cufflinks? Well, I was looking on Etsy for tax-related cufflinks, as one does, and came across them.
When I was in law school, I took a class in state and local taxation from Professor Richard Pomp. Although I don’t spend much of my professional life thinking about state taxes, I clearly remember one of the stories he told us.
A fur store in Manhattan, he told us, would ship empty boxes (or boxes filled with rocks or magazines) to an empty lot in New Jersey for customers. Why? Because nonresident purchasers didn’t have to pay New York sales tax if the purchase was shipped out of state.[fn1]
The New York Timesprovides more detail on the scheme: the furrier in question, Ben Thylan Furs Corporation, would allow customers to take the furs home without paying sales tax (and, with an average fur price of $8,700, the evasion of an 8.25% sales tax saved customers an average of $717.75 per fur). It would then ship a box filled with something else (or with nothing) to create a false record to back the out-of-state purchase. And, in 1985, Ben Thylan was indicted. Continue reading “Every Old Scam is New Again”→